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B U S I N E S S | ![]() Sunday, December 19, 1999 |
weather![]() today's calendar |
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Delhi to face power crisis:
Minister CHANDIGARH, Dec 18 Delhi will face extremely acute power shortages this summer, said Mr P.R. Kumaramangalam, Minister of Power, Government of India, at the Valedictory Session of Infranet 99, organised by CII (Northern Region) and being held in Delhi from December 16 to 18, 1999. Reform process to
continue |
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![]() NEW DELHI: Prime Minister Atal Behari Vajpayee with Finance Minister Yashwant Sinha, Assocham President K. P. Singh and Dr Raj Reddy, Adviser, Information Technology, to the US Pesident, at the inaugural session of the 79th annual meeting of Assocham in New Delhi on Saturday. PTI photo Book defaulting industrialists CHANDIGARH, Dec 18 Employees of three commercial banks here held a demonstration today in front of the head office of the CII to protest against the suggestion forwarded by CII to close weak banks. |
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Ease
provisions of new Act Gestetner
enters SOHO segment
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Delhi to face power crisis:
Minister CHANDIGARH, Dec 18 Delhi will face extremely acute power shortages this summer, said Mr P.R. Kumaramangalam, Minister of Power, Government of India, at the Valedictory Session of Infranet 99, organised by CII (Northern Region) and being held in Delhi from December 16 to 18, 1999. Mr Kumaramangalam said the theft network, which he described as being very well set-up was to blame quite substantially. However, slums accounted for a very small percentage of total transmission and distribution losses, pointed out Mr Kumaramangalam saying that power could only be effectively stolen by those who could afford the necessary expensive equipment. Privatisation of power distribution networks was a very important step that needed to be taken said Mr Kumaramangalam, but this could never happen unless leakages from the system could be plugged. In a poor country, subsidies for infrastructure services could not be done away with, Mr Kumaramangalam further said. For example, if full tolls were charged on all highways, then only 10 per cent of the population could use highways. Probably only those who received free power for agricultural purposes could afford to pay economic costs, he added. Neither the Indian policies nor the documentation was fully-equipped for facilitation of private sector participation in infrastructure, Mr Kumaramangalam stated, except may be for the power sector which had 10 years of learning e.g. most infrastructure sectors, except power, do not even have a model agreement in place, he said. Mr Kumaramangalam invited the private sector to draw up model documentation agreements, risk-sharing terms etc for all infrastructure sectors, and present it to the Government. He stressed on the importance of providing for risk insurance for infrastructure projects. Mr Kumaramangalam also spoke of the importance of securitising regulators, saying that giving them for autonomy meant that they could not be threatened with firing when decisions were not popular. Mr Vinayak Chatterjee, Deputy Chairman, CII (Northern Region), presented the key recommendations of the conference. They were: * Time bound implementation plans and appropriate machinery for monitoring of projects, as well as improvement in the pace of implementation. * Creation and strengthening of autonomous regulatory bodies through legislative changes to define their powers, formulation of ways to make them financially independent and staffing by top professionals. * Progress to cost-based user charges. A political process to achieve consensus on this issue must be initiated at the highest level. * Formulation of innovative public private partnership models, and model legislation for Build-Own-Transfer projects and concessions. * Development of institutional arrangements like project development companies, initiative funds etc to assume development risks. * Appropriate risk-sharing arrangements, focussed on allocating risks to the party best equipped to assume risk. * Dr Rakesh Mohan, Director General, NCAER, said that the fiscal situation of State and Central Governments had severely constrained public investment in infrastructure. Further, regulatory bodies could not be independent until they were financially autonomous and could thus hire top professionals. On the recommendations put forward during the conference, he said that once the first three were achieved, the next three would be easily achieved. Mr Sunil Kant Munjal,
Chairman, CII (Northern Region), said that infrastructure
is an area where India must get its act together in terms
of getting projects with short gestation periods off the
ground. |
Reform process to continue NEW DELHI, Dec 18 The Union Finance and Revenue Secretary, Mr P.G. Mankad has said the reform process and rationalisation will continue and it will be further accelerated to face the challenges of globalisation. Addressing an interactive session with the chiefs of term lending institutions and corporate borrowers at the PHDCCI here, Mankad said the reform process will unshackle the trade and indsutry as also financial institutions and make them sensitive to each others problems as they are inter-dependent. The Finance Secretary urged the trade and industry to have introspection at their business environment, restructuring and improvement in the quality of their products. Unless quality is improved to face competition onslaught, no amount of concessions and incentives will be of much help. They can only be short term palliatives, he said. At the same time, he urged the financial institutions to do a mid-course correction, bring about structural changes and revamping in their procedures, work culture and their mindset so as to be responsive to the requirements of trade and industry. The meeting was also addressed by the CMD of IDBI, Mr G.P. Gupta, the CMD of IFCI, Mr P.V. Narasimham and the MD of TFCI, Mr M. Narayanan. The president of PHDCCI,
Mr Ashok Khanna said FIs should reduce lending cost by
mobilising low cost funds from domestic and foreign
markets like innovative debt and bond instruments and tap
provident fund, pension funds and arrange forex lines
credit, provide swapping facility of high cost rupee
loans into low cost dollar funds. |
Book defaulting
industrialists CHANDIGARH, Dec 18 Employees of three commercial banks including Indian Bank, United Commercial Bank and United Bank here today held a demonstration in front of the head office of the CII to protest against the suggestion forwarded by CII to close weak banks. Employees and their leaders raised slogans against CII and its members and urged to withdraw the suggestion. Mr Vijay Sharma, Mr Balkaran Singh, Mr P.K. Gulati and other leaders addressing the participants in the dharna alleged that in fact a large number of industrialists have been responsible for making the banks weak. Mr Vijay Sharma urged the Union Finance Minister, Mr Yashwant Sinha to do away the Banks Secrets Act and publish the names of all the defaulter industrialists against whom dues worth several hundred crores of banks were pending for the past many years. He said that criminal cases should be registered against the defaulter industrialists and they should be made to return money of banks. He said that the Union Government should follow the example of neighbouring country which had launched a special campaign for the recovery of dues from industrialists. Mr Vijay Sharma said that about Rs 51,000 crore were due against industrialists and banks under pressure from the authorities concerned had declared this amount as Non-Performing assets. He said that with the recovery of NPA from undustrialists, the banking industry in the country would become a most profit earning and efficient sector in the country. Mr Sharma said that all
defaulter industrialists should be blacklisted and no
loan should be advanced to their firms by commercial and
private banks. |
BoP to introduce Internet
banking CHANDIGARH, Dec 18 Bank of Punjab is introducing online internet banking and is creating the required infrastructure for offering Internet enabled banking services for business-to-business and business-to-customer e-commerce. They will introduce digital signatures and smart cards in collaboration with a renowned UK based company using PKI Technology. To offer value added services to clients, the bank is setting up three interconnected Call centres at Chandigarh, Delhi and Mumbai, thus offering round-the-clock banking convenience to the customers for telebanking, faxbanking and electronic fund transfer. The bank is currently working on a strategic tie up subject to RBI approval for entering into the insurance sector which is presently in the process of being opened-up to the private sector. With this the bank would be offering an array of Life and General Insurance products to its customers through its extensive branch and off-site distribution network. The bank is among the first to be Y2K compliant and is using bancs 2,000 software from Infosys and has been certified Y2K compliant by external auditors M/s SQL Star International. The bank has deposit base of over Rs 1,900 crore and an overall business of Rs 2,900 crore with 52 banking offices spread across 25 cities and seven states. On a query by Bombay
Stock Exchange, pursuant to a newspaper article regarding
Bank of Punjab, the bank has informed the Stock Exchanges
that any proposal or any strategic/synergistic tie-up
that the bank may seek or be offered with any other
bank/FI/multilateral agency/insurance company etc would
necessarily require consideration and approval by the
Board of Directors of the bank and as is required in such
cases, the bank would send prior intimation to the stock
exchanges if and when a board meeting is convened for
considering any such proposal. |
Ease provisions of new Act THE Punjab Municipal Act, 1999, has been enacted to replace the Punjab Municipal Act, 1911; the Punjab Municipal Corporation Act, 1976, and the Punjab Executive Act. It is with the President of India for his assent. The provisions in the Act are harsh and impractical to implement and contain ample scope for prosecution covering all sections of population. Only recently the Punjab Government had to withdraw provisions of prosecution in the Sales Tax Act under strong protest from industry. It is an irony that the same Government is providing for prosecution as if with vengeance. Before detailing the provisions of this Act little clarification on PSEBs version is essential. Last week these columns opposed the move of the PSEB to raise security from consumers to three times. The PSEB issued clarification that it has not done anything of this sort. In this regard the PSEB should read its abridged conditions of supply at Sr Nos 8.8 to 8.10. Its auditors pointed this out to the operational staff and the Jalandhar circle initiated action. The Chairman, PSEB, took immediate notice of this and put a stop to the action initiated. The new Municipal Act provides for prosecution for various offences which otherwise are normal lapses. Sinking of tubewell without permission attracts a penalty of Rs 10,000 or three months imprisonment or both. Industry has to depend on its own source of water as municipal water is uncertain and inadequate. Illegal discharge of trade effluent by an owner attracts penalty of Rs 10,000 or three months imprisonment or both. So industry will be at the mercy of the municipal staff. Connection of water pipes/sewers with the municipal water works or drains without permission carries a fine of Rs 10,000 or one years imprisonment or both. The opening of shop without licence attracts a fine of Rs 10,000 or three months imprisonment or both. In large cities every street has small shops. It is not understandable as to how the Municipal Corporation will deal with this situation when such shops have been allowed over decades. Failure to provide urinal in the factories attracts a fine of Rs 10,000 plus Rs 1000 a day. This matter falls under the labour department and this overlapping is hardly desired. House Tax rates for the industry have been revised from 5 per cent to 10 per cent of the market value of the property and it can be revised after every five years. Earlier Act did not provide for revision. The licence fee for the industry has been raised from Rs 500 to Rs 25,000 per year. If any goods carrier unintentationally crosses octroi barrier by mistake penalty of 20 times the normal rate is impossible. Earlier commissioner could compound the amount. Now this discretion has been curtailed to a minimum penalty of 10 times. Similarly minor lapse in transit (Rah Dari) through the city attracts a fine of Rs 20 times the normal rate against Rs 20 only in the old Act. The Act provided for penalty to the maximum extent of Rs 500. Under the new provisions the Municipal Corporation has taken control of almost all activities of industry and trade. This is hardly justified by any standard. Financial burden of taxes is such that the industry cannot run with these provisions. Imprisonment part of the penalty hardly needs any comment. The Government should
withhold the enforcement of the Act and have dialogue
with all sections of propulation. Already octroi rates
have been revised by more than 100 per cent against the
promise of abolishing of octroi. |
Gestetner enters SOHO segment CHANDIGARH, Dec 18 Gestetner India Ltd, today launched Gestetner Radius 145, a state of the art laser printer-cum-digital copier-cum-scanner, all in one amazingly compact user friendly unit. Keeping with Gestenters vision of office automation products for the new millennium, the Radius is the first multifunctional high-technology machine and also features an optical character recognition facility in the scanner unit. Mr Paul Wilkinson, Managing Director, Gestetner India Limited said, Radius is a state of the art multi-functional product that will redefine the standards of office automation efficiency. We recognised the growing need for efficient multifunctional office automation products among small business houses, professionals and entrepreneurs who cannot afford to block their capital and space on three separate machines Radius is an answer to the needs of this huge segment. He said it will top in the small office home office (SOHO) segment. Mr Wilkimson said the company is planning an aggressive marketing strategy to tap the potential in the SOHO segment in India. As part of its marketing and customer service efforts the company is in the process of setting up an extensive dealer network across the country. This will further complement its existing specialised sales and service teams at its 37 branch offices around India. Gestetner India Ltd a 51
per cent owned subsidiary of Gestetner Holdings. The
company is a leading player in the office automation
industry, offering a complete range of Copy Printers,
Duplicators and Digital Copiers. The company has achieved
a sales turnover of Rs 62 crore during 1998. |
Analysts
diary LAST week, I signed off promising to provide some dope on Peerless Shipping a seemingly innocuous company which would have, in normal circumstances failed to enthuse investors. However, it has, and so much so that a BSE broker is reportedly on record predicting that its share price will touch Rs 1,000 before the year Y2K is out. So, whats cooking here? For starters, the company is to be renamed Coflexip Stena to reflect the change in controlling stake in favour of the MNC Coflexip Stena offshore, which is a global giant in sub-sea field development, operations and services. Of course, this development merits a re-rating of the company, but remember, its price has already ascended from a lowly Rs 6 a little more than a year ago to Rs 200 plus. Well, whats really driving the price is the hitherto unsubstantiated rumour doing the rounds that a Bombay based financial wizard, who cannot be named for obvious reasons, has been appointed the international advisor of the group and that an NYSE listing figures in the game-plan. Again, this is conjecture, and there have been cases in the past when deals have fallen through resulting in a hurried decline of share prices. So, that then is the Peerless story as it stands. When the share price of Hindustan Lever dipped below the Rs 2,300 level recently, that is, less than a month ago, we had cried ourselves hoarse in our Investment Newsletter that this is too good a company to deserve such a sharp price decline. Agreed, the last quarter was not exactly a bumper one, but just take a look at its brand equity and one would be convinced that this scrip merits a far higher rating than it has been accorded. Expectedly, its share price has bounced back and those who had seen the opportunity when it arose less than a month ago would be laughing their way to the bank right now. Furthermore, the grapevine has it that HLL may declare a Y2K bonus. Again, while this is pure conjecture, the fact remains that this mother of all MNCs in India does have the fire-power in its reserves to declare a bonus. Take the case of the forthcoming issue of Zenith Infotech. Apparently miffed by the rejection of their request for firm allotment a cartel of BSE brokers have been badmouthing the issue saying it is overpriced. While I am yet to analyse this issue and hence unable to pass judgement on its pricing at this moment, it is quite evident that unlike many of the johnnies come of late who are recent converts from various sectors and more particularly the finance sector to the thriving Information Technology sector, Zenith already has an established brand name which provides it greater leverage. Or is the badmouthing a ruse on part of the broking fraternity to scare away some prospective investors away so as to improve their own chances of allotment. CNBC has recently
launched a real-time programme based on the Indian
markets named Bazaar, which is fairly
informative and very impressive. The show anchors,
Senthil and Shailendra are very savvy and in my opinion
compare very favourably with their contemporaries in the
same channel who cover other Asian markets. With
intellectual capital becoming the crux in todays
information technology driven world, it is my personal
belief that in the first quarter of the next century
India will be in the forefront of the global economy. Of
course, for that to happen our political fraternity too
has to play ball. Now, isnt that asking for a bit
too much especially given that India seems ill-fated to
go down in history as possibly the last nation where the
Commie bastion crumbled? Not necessarily, if you consider
that two of the southern states where much of the IT
action is taking place have technosavvy Chief Ministers. |
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